Find weighted average cost of capital - dividends, Corporate Finance

Duke Power Corporation has $500 million (face value) of zero-coupon bonds, which will provide 6% return to the bondholders and will mature after 10 years. The stockholders of the company expect a growth rate of 3% in dividends, and a dividend of $3.00 next year. With 30 million shares of common stock outstanding, it is currently selling for $50 a share. Duke Power has a tax rate of 35%. Find its WACC.

Answer: 8.20%

Posted Date: 3/8/2013 5:08:05 AM | Location : United States







Related Discussions:- Find weighted average cost of capital - dividends, Assignment Help, Ask Question on Find weighted average cost of capital - dividends, Get Answer, Expert's Help, Find weighted average cost of capital - dividends Discussions

Write discussion on Find weighted average cost of capital - dividends
Your posts are moderated
Related Questions
GeKay stock is worth $100, or $80, or $60. Investors believe that each case is equally likely so that the current share price is the average, namely $80.  Suppose Mr. Satanak, th

Table gives the average MAPE, again for all SKUs with positive preview demand together (overall) and also per preview demand class. We remark that despite of the large differences

Question : (a) Compare the financial system of the Mauritius and USA. Give differences between the two systems. (b) One of the facilities given by the financial system is

What is the basic goal of a business? The main financial goal of the business firm is to make the most of the wealth of the firm's owners.  Wealth, in turn refers to value good

Review of Revenue This activity will require you to access at least a portion of the federal budget as well as a state, local and an agency budget. This can be done online. Howeve

#Minimum 100 words accepted#

Ask question #Minimum 100 words aapplicability of allocation function of fiscal policy#


Flower stands whose beneficial life spans a period of eight years was purchased on 1 August  2011 for $12,000.   It can be sold as scrap for $2,000.  The business has a financial y